After selecting an energy retailer, many businesses “set and forget”. A year can go past – or 2 years, or 5 years, or even more – and you’re still with the same energy provider you started out with at the beginning.
But with your energy needs changing over time and the energy market evolving as well, paying attention to your energy consumption is crucial.
It could be the case that you’re overpaying for your energy – especially if you’re on the wrong type of tariff for your business.
While recent research shows that 43% of households don’t know what energy tariff they’re on, it’s also the case that a number of Australian businesses don’t know what tariff they’re on, either. This can have a big impact on a business’ bottom line.
Here’s the difference between the tariffs and how to decide which one is most suitable:
- Single rate tariff
Energy retailers may list this as anytime use, flat rate or peak rate, but the bottom line is: you pay the same rate for your energy usage, no matter what time of day it is. The rate is usually somewhere in between the peak and off-peak rate charged under a “time of use” tariff” – so it’s higher than the ‘off-peak’ rate, but lower than the peak rate.
Single rate tariffs may be suitable if:
- You want the freedom to use energy as and when you need it, which is often during “peak” periods.
- You don’t want to worry about scheduling high-energy tasks for off-peak periods.
- You want a “set and forget” plan where you don’t engage much with your energy usage.
- Time of use tariff
With this tariff, the amount you pay depends on the time of day that you consume energy. A time of use tariff can charge up to three separate rates: peak (the most expensive tariff, usually in the evenings), off-peak (the least expensive tariff, usually overnight) and shoulder (for the times in between, such as mornings and afternoons).
Time of use tariffs may be suitable if:
- You want to actively manage and reduce your energy consumption by scheduling tasks to take advantage of lower-rate periods.
- You can schedule some high-energy activities to happen overnight, when rates are lowest.
- You’d install a smart meter to get updates on your electricity usage, so you can make real-time adjustments.
- Controlled load
This refers to electricity that is being used to power a stand-alone item, like an electric hot water service or irrigation pumps. Controlled loads are recorded on a separate meter and can be billed as an off-peak rate. A controlled load tariff is generally offered in addition to a time of use tariff.
Getting the right plan to suit your energy usage and requirements can make a big difference to your overall energy bill. If you’re on a single use plan and have the ability to manage or schedule your high-energy activities, you could stand to save money with a time of use tariff. Or if you’re on a time of use tariff and you’re paying top dollar for peak energy periods, you could potentially reduce your bills on a single use plan.
Let us help you make sense of your energy bill! We can help you work out your current tariff and try to help you find a better deal. Contact us at Make It Cheaper for an obligation-free review on 1300 957 721.
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